As leaders of the Senate Banking, Housing and Urban Affairs Committee continue their slow but steady efforts to craft a comprehensive, bipartisan mortgage finance reform bill, experts generally agreed on the necessity for some sort of government backstop for MBS but differed on the details. This week’s hearing was the first of several planned by Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, as they work to build out their own reform legislation on top of the bill, S. 1217, filed earlier this year by Sens. Bob Corker, R-TN, and Mark Warner, D-VA. Johnson said...

Wells Fargo originated nearly one out of every five jumbo mortgages completed in 2012, according to a new analysis and ranking by Inside Nonconforming Markets of Home Mortgage Disclosure Act data. Wells had a 17.8 percent share of the $220.51 billion in non-agency jumbo mortgages originated last year, more than double its nearest rival. The origination volumes are based on one-unit conventional loan limits for specific metropolitan statistical areas and the $417,000 conforming loan limit [Includes one data chart] ...

Financial industry trade groups want all Title II forward mortgage loans that meet FHA requirements to be treated as “safe harbor” qualified mortgage loans instead of being lumped in either of two QM buckets as proposed by the Department of Housing and Urban Development. Commenting on HUD’s proposed definition of a “qualified mortgage,” the industry groups – Mortgage Bankers Association, Consumer Bankers Association, Consumer Mortgage Coalition, American Bankers Association, and the Independent Community Bankers of America – urged HUD to ...

Proposed options for adjusting FHA products, market presence and powers could have a direct effect on the availability of credit for borrowers and on the FHA’s ability to respond to changing market conditions, according to a new study by the Government Accountability Office. In certain instances, the recommended changes would entail tradeoffs – a downside for every upside. Industry participants, researchers and the FHA have suggested these options to improve FHA’s long-term viability or for shrinking the agency’s footprint in the mortgage market. The GAO undertook the study to determine ...

The Treasury Department’s “strategic plan” includes working to reform the government-sponsored enterprises and establishing a new position for a chief risk officer, according to a memo by Mary Miller, the Treasury’s undersecretary for domestic finance. The memo was dated Sept. 16 and uncovered this week by Bloomberg News. Reliable sources confirmed the accuracy of the report. According to the memo, the Treasury plans...

A mortgage lender’s strategic decision to originate only qualified mortgages, in and of itself, will not heighten its fair lending risk, according to joint interagency guidance issued earlier this week. The agencies said they have received numerous inquiries from lenders about whether they would be liable under the disparate-impact doctrine of the Equal Credit Opportunity Act if they originate only QMs as defined under the Consumer Financial Protection Bureau’s ability-to-repay rule. Based on their view that the requirements of the ATR rule and ECOA are...

The CFPB last week ordered Mortgage Master Inc. and Washington Federal to pay $425,000 and $34,000, respectively, in civil penalties for allegedly violating the Home Mortgage Disclosure Act, which requires certain mortgage lenders to accurately collect and report data about residential mortgages. In its HMDA reviews conducted at the two companies, the bureau said it found their compliance systems were inadequate and that they had severely compromised mortgage lending data. The CFPB said Mortgage Master had significant data...

Five federal regulatory agencies have issued a joint proposed rule to implement certain provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 regarding private flood insurance, escrow of flood insurance payments and forced-placement of flood insurance. The proposal would affect loans secured by property in a special flood hazard area (SFHA), which is defined as an area within a floodplain having a one percent or greater chance of flooding in any given year. The rash of catastrophic flooding seen in recent years across the country has underscored the need for stronger flood insurance regulations. The Office of the Comptroller of the Currency, Federal Reserve Board, Federal Deposit Insurance Corp., Farm Credit Administration and the National Credit Union Administration are revising...

It’s not every day that a stock comes public at $20 a share, falls 7 percent on its first day of trading and then continues to drift downward. Then again, if that stock is a mortgage investing real estate investment trust like Cherry Hill Mortgage Investment Corp., it’s no big surprise. Thanks to rising interest rates – which actually have been in decline during the government shutdown and uncertainty over the U.S. debt ceiling – mortgage REITs have been battered in the market. Cherry Hill, a spin-off of Freedom Mortgage of Mt. Laurel, NJ, went...

A Manhattan federal judge last week rebuffed a motion by a number of major lenders to dismiss a bid by the Federal Deposit Insurance Corp. against the firms in connection with $388 million of non-agency MBS sold to the now-defunct Colonial Bank. The FDIC filed its complaint in August 2012, alleging that the defendants – including JPMorgan, CitiGroup, Ally Securities, First Horizon, Credit Suisse, Deutsche Bank, Merrill Lynch and Wells Fargo – placed poor-quality loans in the 11 underlying residential MBS and then misled investors by marking them as safe investments. Montgomery, AL-based Colonial Bank failed...